Finland is undergoing a microbrewery boom. There are currently 85 microbrewing companies in the country with more than a third of that number coming from businesses started in the past 2 years. Finnish craft is also recognized worldwide - beer from Pyynikin Käsityöläispanimo has won top recognition from World Beer Awards in both 2016 and 2017. But beneath the surface there are signs that not everything is rainbows and unicorns.

Recouping big investments is no sure thing.

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A lot of new companies were started and massive investments made in anticipation of deregulation that was supposed to finally allow microbreweries to sell directly to consumers. As the widely expected regulatory changes have stalled in parliament and the date of their potential implementation moves further and further into the future, investment and political risks start materializing for many businesses involved.

Out of 85 Finnish microbrewing companies, only nine have annual revenues above one million euros and just two – Laitilan Wirvoitusjuomatehdas and Nokian Panimo – are responsible for the lion's share of revenues and profits of the whole sector in the country. In other words: with investment costs sunk but the expected gains in sales volume from deregulation have yet to materialize, almost everyone is either deep in the red or staying barely profitable.

To qualify for the Finnish government's definition of a microbrewery and gain a highly coveted reduction to excise taxes owed a brewery must produce less than 15 million liters of product in a calendar year with a few additional ownership structure requirements to certify genuine independence.

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Old rules are causing new headaches.

Some of the businesses involved are also reeling from a recent change in how the customs tax authorities evaluate the ownership structure to decide whether a brewery is truly independent and qualifies for the break on excise taxes. According to the law, two or more microbreweries can cooperate together for the purpose of preparing ingredients, packaging, marketing and distribution. The law does not say anything about cross-ownership of business, which according to the new interpretation by the customs tax office means that cross-ownership is forbidden.

The companies are protesting this notion and point to a Supreme Administrative Court decision from 1997 that established that one producer having a 20% stake in another does not put the independence of the latter in question. Nevertheless, six companies have received retroactive tax bills that amount to up to 10% of their annual revenues. It goes without saying that none of the businesses involved have that sort of extra cash on hand, so the potential court battles and possible payment plans will stretch on for years, adding to the uncertainty.

Finnish breweries and distilleries have been rather adept at utilizing crowdfunding for raising capital: EUR 360,000 from 340 investors helped launch Ägräs Distillery in 2015, and Sangen from Oulu successfully raised over one million euros in 2016. Many other crowdsourcing campaigns have raised significant amounts of capital, which goes to show that for as long as craft beer is expected to remain on a growth trajectory and is visible in the media, Finnish producers have at least one lifeline even when the going gets tough.